GLOBALIZATION AND ITS DISCONTENTS

Globalization, the melding of the world’s economies resulting in enhanced prosperity. Globalization, the lovely idea that each nation would contribute its unique skill set and consume its proportional needs.

Inefficiencies in economic productivity would be smoothed out or eliminated. Chinese workers would be in the factory buying raw materials from Brazil and thus making cheaper shoes for Italians to buy. What the Chinese were supposed to buy from the Italians or any other first world economy was unclear, but eventually they would find themselves in suburban homes watching a non-pirated Disney movie and then one day spend money abroad by visiting the Empire State Building or the leaning tower of Pisa.

America and England were supposed to provide financial services and sophisticated capital structures, giving the developing world credit cards and access to equity markets for investment in shares and bonds. We would all be stakeholders in the global enterprise of planet growth and liquidity. Huge pools of available capital from; Dubai Moscow, Shanghai and Geneva would overflow their traditional dikes and seek efficient returns in equally diverse markets. Africa, Latin America and S.E. Asia would tap into this ocean of liquidity and close the global circle.

Home mortgages from San Diego would be sold and disbursed to Norwegian townsfolk, Chinese state banks as well as Arab sovereign funds. Pensioners from Michigan would buy into Russian state oil giants as a part of their 401k diversification courtesy of Vanguard. Small depositors in Austrian regional banks could now get the hyper charged returns from Hedge funds that in the past made the wealthy wealthy.

Instead, the virus of speculation, thirty to one leverage, currency manipulation, and finally nationalization resulted. Once limited to silly economies like Brazil, Argentina and Thailand, these symptoms have infected the bourses of London, New York and Berlin. First world money centers were like a teaching hospital in Stockholm that sends its doctors to Rwanda to assist in upgrading sanitation efforts, only to have them return and bring the Ebola virus back to Sweden. The wholesale panic, the white knuckle trading, the gut wrenching market swings occurring simultaneously all over the globe is proof that globalization has been dumbed down to the very basement.
Other virus victims


Looking backward, it is clear that capital in the global economy was treated with very little respect. The great distances from Sarasota to Beijing caused investment myopia. Trust was placed in brand names like Lehman Brothers, AIG and Bear Stearns which was no more warranted than the trust placed in Paramalt’s accountants or melamine laced Yili brand milk. It turned out that the high and mighty compensated heads of these disinvestment houses were no more sagacious than the gold mine share stockbrokers of Cripple Creek fame, one of the previous grand swindles in history.

Don’t cry for me America, (sung to the tune…Argentina). American investors, bankers and everyone at economic large can now feel what it was to be an Argentinean, Turkish, Thai or Russian businessman who lost capitol during one of their innumerable crisis. Wall Street meet Bangkok and now tell me the difference between the 2008 sub-prime blowout and the Thai Bhat crisis of 1997. Wall Street meet Buenos Aires. Is Sarah Palin Eva Peron, Todd her Juan?













Yes, the formally fabled investment and banking houses have reverted to the mean of third world economics. The globalization that was supposed to usher in universal prosperity has brought universal panic. The stock charts from Reykjavik to Tokyo and everywhere in between are all facing the same direction. Global banking now means global mistrust. LIBOR, the measure of financial contagion al la the flu pandemic of 1916. Greenspan offering up a planetary mea culpa.

The only positive light I see coming out of this mess is the highlighting of nationalistic silliness. Don’t those Russians look stupid financing advanced jet fighters to Venezuela? That’s one trade I bet Chavez would like to unwind, spending his jacked up by speculation petrodollars… on insanity. A few more saber rattling Mediterranean military maneuvers by the Russian fleet and they will be broke too. America will either print currency like its late rump half, the confederacy or it will have to budget and save like a real country, if it wants to retain a leadership position. The funding of folly, be it flipping Florida condos or a space race between India and China, where indoor plumbing is rare, will be on a global hold.